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$3.5 Billion at Stake Over Interpretation of WTC Insurance Policy

Aired June 2, 2002 - 10:08   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Every day since September 11, we've heard something about the World Trade Center -- one complex, two buildings, and now billions of dollars at stake over the interpretation of an insurance policy. CNN's Garrick Utley explains this story.

(BEGIN VIDEOTAPE)

GARRICK UTLEY, CNN CORRESPONDENT (voice-over): Here is the question -- in the tragedy of September 11, was there one attack on the World Trade Center, as the insurance companies insist, or were there two attacks, as the owner or lease holder of the Trade Center claims? The answer is not simple, and billions of dollars are at stake.

(on camera): Specifically, the $3.5 billion insurers are ready to pay out if it was one occurrence, or the $7 billion they may have to pay if it's determined that there were two occurrences here. Why the dispute? Because 22 companies were sharing the expensive coverage and the risk that goes with it. And on September 11, believe it or not, the final language in the insurance contract had not yet been agreed to.

(voice-over): Larry Silverstein became the lease holder of the Trade Center in July of last year. He would not comment on camera. But under his version of the proposed insurance policy, there is no limit on the number of occurrences. And, therefore, he should collect the $7 billion.

Hundreds of lawyers on both sides are busy working on the case. Those representing the insurance companies cite another insurance document under which the coverage went into effect. It limits their liability to, quote, "all losses or damages that are attributable directly or indirectly to one cause or to one series of similar causes." To the insurers, September 11 looked like a series of similar causes.

UNIDENTIFIED MALE: It's one occurrence because this was a coordinated terrorist attack.

UTLEY: And although you and I may have seen the Trade Center as two very tall buildings, the insurers are treating them as one property. BARRY OSTRAGER, INSURER: This was one insured location, which had, you know, common infrastructure, and the parties recognized and understood that it was being insured as one insured location.

UTLEY: The insurance companies say that Larry Silverstein, like other property owners, simply underinsured the value of his property.

(on camera): How much money is finally paid out, $3.5 billion, or double that will most likely be decided in the courts. But one verdict is already in, the oldest one in any agreement, particularly insurance -- get it in writing. Get it in very specific writing.

Garrick Utley, CNN, New York.

(END VIDEOTAPE)

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